Top 5 Talent Management KPI’s

I was reading an excellent White Paper by among others Jeff Higgins from Human Capital Management Institute which is called “Top Five Metrics for Workforce Analytics“. The White Paper lists five metrics of which one of them is an index they call ‘Talent Management Index’ – something which alerts me when I read it.

While the report does not go into too much detail, it does outline their suggestions for top 5 metrics for Talent Management.

That got me thinking about my suggestion for top five metrics for Talent Management. I would argue that you really shouldn’t have more than five at the most. KPI’s can overwhelm you and they must be used with care (see here for the pitfalls of using HR KPI’s). My suggestions are;

  1. Talent Retention (this is more positive than its negative cousin ‘Talent Turnover’). This is measured by taking the number of identified talents leaving the company during the year divided by the number of identified talents at the beginning of the year. For me, retention rates are not always very interesting. Many times you do want to get rid of low performers and you should be able to that without messing up your Talent Management KPI’s. But it must be imperative to keep talents – otherwise they shouldn’t be identified as such.
  2. Talent Performance. This is measured by taking the performance score for your identified talents from your Performance Management System. An effective talent program should be able to develop talents in such a way that their performance score improves.
  3. Time to Hire for Critical Roles. This one a bit tricky, because this KPI actually can work against you. The best candidate for a critical role may not be the one which is just available (there may be a 3 month notice period). However, a successful Talent Management program should be able to fill critical roles quicker from within. This should be measured.
  4. Skills gab filling process. This is measured by taking your talents and measure their talent gab at the beginning and at the end of the year. The talent gap will be individual from company to company but be based upon your individual assessment made at the beginning of the year. It may also come from your Succession Planning tool. In any event you must have some way of measuring how well the skills gab is changing.
  5. Talent Engagement Levels. This is measured by taking the engagement survey and identifying the level for your talents.

I have written many times, that I think Talent Management is the most important strategic process for HR to get right. This is simply because the potential pay-off is phenomenal compared to many other HR processes.  Therefore it is too important not to measure and evaluate properly. Let’s get that right.

I will be very interested in hearing about alternatives to these Talent Management KPI’s. Which ones do you used and how do they work for you?

15 comments

  1. I would contend that talent quality is most important. You must understand the quality of who/what you have to know what your comparative cost/value of retention of people is.

    You should have a baseline study that creates a foundation, one that shows the variance between individuals in regard the the performance measures which are most meaningful to that role. From there, create a value to the variation between individuals at different level. From that value you can determine what the incremental cost of retention of one vs. departure of another is. Now, you can manage your human capital…..

    Just a sliver of thought…there is likely not one “right” answer.l

  2. Hi Don
    That is an interesting thought. I was thinking about how to create a KPI for quality and couldn’t come up with a better one than ‘skills gap filling’ described above.
    How would you suggest that your quality KPI could look like (what is the formula) and how is it defined. I think that it could be a very valuable KPI if it can be measured.
    Best
    Morten

  3. Thank you for this very insightful article. I am a Talent Manager who recently gained appointment in an airline services and logistics company. Will it be realistic to include the ability of the Talent Manager to create workable KPI’s for other departments and units in the organisation.

    Regards,

    Adedayo Adebisi

    1. Hi Adedayo,
      I am glad that you liked the article. I appreciate that.
      I think it is possible to help the rest of the organization to create workable KPI’s if they don’t have that. The value of good KPI’s are simply too great. So good luck with that.
      Best
      Morten

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